Andrew Bailey, head of the Bank of England, has said that the UK authorities need to be “very clear” about what problems a national digital currency (CBDC) will solve before proceeding with its development.

The public consultations on the legal attributes of the digital pound will begin in the United Kingdom in the coming weeks. Bailey has questioned speaking before a parliamentary committee on January 16 the need for a CBDC. According to him, the country already has an effective wholesale cash settlement system.

He has added:

“I think the question of whether a wholesale central bank digital currency is needed remains open.”

He has also said that he is wary of CBDCs as a tool for retail use.

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